Dell (DELL), the Round Rock, Texas-based computer maker, is not known for splurging billions of dollars on acquisitions. So its decision to buy Nashua, N.H.-based storage networking equipment maker EqualLogic for a whopping $1.4 billion in cash has certainly drawn attention.
“Storage is the fastest part of Dell’s business,” CEO Michael Dell said in an interview with The New York Times. “There’s an explosion in the amount of data being consumed.”
Storage brings in about $2.4 billion a year for Dell, much of it from the resale of devices made by EMC Corp. (EMC). In other words, despite making a lot of sales, Dell doesn’t get a bigger piece of the pie. No wonder Michael Dell is looking to cut EMC out of the picture and take control of the company’s storage destiny.
Some may not remember, but at VMWorld back in September Michael Dell himself introduced a new, non-EMC iSCSI SAN product, the MD3000i. He said that the growth was in the small- and medium-sized businesses, and that traditional storage guys were ignoring the market. His declaration of independence should concern EMC, because Dell has been EMC’s play in the fast-growing SMB market.
“If the MD3000i turns out to be a fast-moving product, EMC will likely see a drop in revenue from Dell, which could force a restructuring of their relationship,” writes Ashok Kumar, analyst with CRT Capital Holdings, an investment bank based in Stamford, Conn. “EMC has historically been a demanding and jealous business partner.”
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6:18 AM PT
[...] EMC has been merry. But there happy days may be behind them, a point made abundantly clear when a risk-averse Dell dished out $1.4 bil to grab its own data storage provider, Nashua’s [...]
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[...] like XDrive. Computer makers like Dell are also moving in: Dell said back in November that it plans to acquire storage vendor EqualLogic for $1.4 billion in cash, and it already offers an on-demand backup solution called DataSafe. Share/Send Sphere [...]
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[...] (link) (link) [...]
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[...] low-key at CES. Meanwhile it has bought three enterprise software companies and storage company EqualLogic. Consumer is about 10 percent of its sales, so Dell can’t afford to take its eye off the [...]
9:01 AM PT
[...] makes data storage software. Official Blog Post | TechCrunch | GigaOm| [...]
8:23 AM PT
[...] still a lot of money is going after that, but it has been rebalanced. Now firms see the value that EqualLogic and virtualization has generated, and it’s time to [...]
4 comments so far
1:46 PM PT
seems, Dell has given up on Games, phone and music business.. or perhaps right move to have seperate niche than high flyer?
6:06 PM PT
Seems like a smart move for Dell. We shall see what kind of quality these Equilogic/Dell devices will provide.
3:35 AM PT
I am more of a fan of HP and MAC. Dells have always let me down =[
12:26 AM PT
I bought a Dell today and the hard drive failed on the first boot up. Called there tech support and got a person that only gave canned responces. After 30 min. on the phone the guy tell me he could not help me and gave me another number to call . I called and they said it was maybe the hard drive. I needed to buy a hard drive and have it there when the tech got to my home. I told them I just bought the Dell to hours ago many times. After repeating myself 5 times they said I need to return it to Best Buy were I bought it and go right to the geek squad desk for repair. Hell I bought a new machine and you would think it would at least boot one time. After that I got on there chat and was told more or less the same thing. I told the chat guy It was there problem and not Best Buy’s . I was told that Best Buys told me about a contract between the two about tech support . My only comment was and I repeated myself was I bought a Dell new and they need to replace it or come to my house and fix it free since I would have to drive over a hundred miles for repair……Tim from Ohio In Dell Hell
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